Sales and Use Tax Annotations

Annotation 330.2483

(a) IN GENERAL

330.2483Option to Purchase. Tax applies to the amount required to be paid by the purchaser upon the exercise of the option. This is the case whether the lessor had elected to pay tax measured by the purchase price or if the lessor instead collected tax from the lessee measured by rentals payable, since the purchase by the lessee is a separate retail transaction from the lease. In a sale and leaseback transaction which is a financing transaction, the buy out at the end of the "lease" term is not subject to tax because it is not a "sale" under section 6006. 2/6/90.

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